The London Metal Exchange (LME) on Friday issued a consultation paper on proposed changes to rules on position limits to comply with a directive from Britain’s financial regulator.
The Financial Conduct Authority currently sets and administers position limits in commodity derivatives to prevent market manipulation and abuse, but this responsibility will pass to the trading venues themselves from July 6.
“The new regime will give the LME greater insight into positions across the market and an ability to calibrate and manage position limits directly,” the LME, the world’s primary metals marketplace, said on Friday.
It first outlined the plan in December.
“The LME acknowledges that there may be costs in complying, or otherwise in connection, with the proposals set out in this consultation,” it said in the 149-page paper.
“However, the current view of the LME is that the proposals are justified as they are in the interests of the wider market and would strengthen LME markets.”
The consultation will be open for responses until 6 p.m. (18:00 GMT) on March 27.
(By Polina Devitt; Editing by David Goodman and Tomasz Janowski)
